Despite strong inflationary pressures and the war in Ukraine, with the latter factor fueling the former to some extent and together leading to an erosion of the purchasing power of household disposable income and increased uncertainty in the economy, retail sales in Greece remained resilient in April 2022, notes Eurobank in its “7 Days Economy” weekly bulletin.
As he notes, in May 2022, the manufacturing output index (and overall industry) moved up on a monthly and annual basis, following a decline in April 2022.
According to data from the Hellenic Statistical Authority (ELSTAT), the seasonally adjusted retail trade volume index strengthened on a monthly basis for the third month in a row in April 2022 at a rate of 0.9% from 1.9% and 2.0% in March and February 2022 respectively. In annual terms, the rate of increase remained strong at 9.7% (12.5% ​​in March 2022), partly reflecting positive base effects due to the restrictive measures of the previous year.
Finally, for the first four months of 2022 as a whole, the retail trade volume index increased by 1.3% compared to the previous quarter and by 10.5% compared to the corresponding quarter of the previous year. These results do not deviate much from the performance of real private consumption in Q1 2022 (2.5% QoQ, 11.6% YoY).
Of the 8 main store categories, only one, that of large food stores (super markets), recorded a decrease in turnover at constant prices in April 2022 (-1.1% MoM and -3.5% YoY). In the rest, there was an increase in sales volume on a monthly and annual basis, with the results being as follows: food, beverages, tobacco (11.5% MoM, 12.2% YoY), pharmaceuticals, cosmetics (2.9% MoM, 16.2% YoY), Books, Stationery, Other (1.9% MoM, 16.9% YoY), Clothing, Footwear (0.7% MoM, 25.6% YoY), Fuel, Motor Oil (0.7% MoM, 13.0% YoY), furniture, electrical, home appliances (0.6% MoM, 9.0% YoY) and department stores (0.3% MoM, 17.9% YoY).
According to Eurobank, based on the above data it is proven that from the beginning of the year until April 2022, sales in the retail trade were resistant to inflationary pressures. This result was contributed by: the support measures against the energy crisis of the economic policy makers, the multiplier effect of the support measures of the previous years against the pandemic, the strengthening of savings (mainly in 2020), employment and the post-pandemic dynamics of demand .
However, as Eurobank notes, the retail confidence index (source: IOBE, European Commission) deteriorated in the first half of 2022, with the June 2022 value at a 13-month low. It is possible that the next observations to be published for the retail trade volume index will record a further slowdown or even a reduction in the monthly and annual rate of change.
The manufacturing output index, after falling in April 2022 (-2.0% MoM, -0.9% YoY), moved upward again in May 2022 (2.3% MoM, 4.9% YoY ). The same was the case for industry as a whole, with output increasing by 2.4% MoM and 2.8% YoY (-7.8% MoM, -5.3% YoY April 2022).
Eurobank notes that the manufacturing sector has shown resilience to the first wave of the pandemic with a relatively mild drop in output of 1.4% in 2020, while 2021 saw a strong output increase of 8.7%. The rise in production costs due to the energy crisis and the slowdown in the economies of the Greek economy’s trading partners constitute downside risks for the manufacturing sector (and not only) in Greece.
Like the confidence index in retail trade, the corresponding one in industry recorded a deterioration in the 1st half of 2022. Specifically, from 13.3 points in January 2022, it decreased to 0.3 points in June 2022 (a 14-month low). Therefore, although the indicators of retail trade volume and production in the manufacturing industry showed relative resilience to inflationary pressures, the former until April 2022, the latter until May 2022, however the corresponding confidence indices deteriorated to lows of more than 12 months at the end of the 1st half of 2022, increasing the possibility of a slowdown or even a decline in the future.
Source: Capital
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